8009

• UCREFRP Catalog Number: 8009
• Author: Natural Resources Law Center.
• Title: Restoring the Waters.
• USFW Year: 1997.
• USFW - Doc Type: Boulder, CO.
• Copyright Material: YES

CONCLUSION: Challenges For Water Rights Transfers
Authority to Hold
Instream Flow Rights
State laws differ on who may acquire and
hold instream Elow rights. For example,
the Oregon Water Trust was established
because the Oregon law appears to be
favorable to instream rights, since it
explicitly allows for their creation and
makes them equivalent to other water
rights. But Oregon law is unclear on
whether a private party such as the Trust
may be the holder of an instream water
right.
Oregon law defines an instream water
right to be a right held by the State Water
Resources Department in trust for the
people of the state. The only entities that
may apply for new instream rights are
three state agencies: the Departments of
Fish and Wildlife, Parks and Recreation,
and Environmental Quality. The statute
specifies that if a right is granted upon an
agency's request, the water rights certifi-
cate is issued in the name of the Water
Resources Department. Another provision
of the instream rights statute (which the
Trust relied on in its establishment)
provides that any person may purchase,
lease or accept a gift of an existing water
right for conversion to an instream water
right. This portion of the statute states that
the Water Resources Department will issue
a new certificate for the instream water
right, but it does not say whether the
certificate will be in the name of the state
or the private party.
The Trust, relying on the "purchase, lease
or gift" statute, has taken the position that
it may legally hold an instream water right
in its own name. However, the Water
Resources Department, relying on the
definition language and the explicit
statement that the department will hold
any rights requested by other state agen-
cies, disagrees. Whether the Trust's
position will eventually be adopted
remains to be seen. If it is not, only time
will tell if the Trust can create along-term
successful program as a broker for acquir-
ing instream water rights to be held by the
state. In the meantime, the Water Re-
sources Department is exploring creative
ways for instream water rights to be
managed by parties other than the state
even without explicit private "holdership."
Calculating the Value of Water
Rights
There are as yet no extensive, established
markets for leasing or buying water rights
for conversion to instream rights. Entities
must, therefore, calculate the value of the
water in a particular consumptive or
instream use to set their own prices for
these transactions.
Oregon Water Trust: In Oregon, the Trust is
on the cutting edge of setting prices for
instream flow transactions, along with

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Does it matter who holds the
water right?
State law may preclude all but a
specified state agency from holding
an instream flow right, but there are
several reasons that entities such as
the Trust might be allowed to hold
such rights:
^ A private entity may be more
effective at monitoring and
enforcing rights. State agencies
may be hampered by lack of
resources (both money and
personnel) and by political
pressures to favor consumptive
uses.
^ The state agency may find itself
with a conflict of interest. The
state must be the neutral
administrator -allocating and
policing consumptive water rights
and balancing interest group and
public involvement - as well as a
water right holder, advocating
protection of its own right in
potential competition with the
other righf holders.
^ A private entity may be able to
operate in the market more
effectively, to obtain funds for
water rights acquisition and to
negotiate deals with water rights
holders.
To preclude a private entity from
holding instream water rights
relegates these rights to second-
class status. The prior
appropriation system creates
strong private property rights in
water rights holders. To deny
similar status to instream rights
makes them different from all
other appropriative rights -
unstable and vulnerable to attack
as local politics change.
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